Is Flat for Everyone? Evidence from a Field Experiment of Structural Decentralization
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Date
2022-04-16
Authors
Michael Y. Lee
Paul I. Green
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Abstract
While flattening hierarchies and distributing decision making downward is sometimes described as a
form of occupational nirvana for contemporary knowledge workers, prior research on the effects of
decentralization on employee work experience has been mixed. This calls for greater examination of
the sources of heterogeneity in workers’ responses to decentralization. In this study, we conduct a field
experiment where groups were randomly assigned either to operate in a decentralized structure or to
remain in a traditional hierarchical structure. We use this experiment to examine the causal effect of
decentralization on employee work experience, as well as to explore whether and how the effects of
decentralization vary depending on employee ability and work preferences. We show that
decentralization had no average effect on employee work experience—measured as job satisfaction,
engagement, and turnover intention—but decentralization improved the work experience of employees
with high job-related ability and employees with strong a priori preferences for working in a decentralized
structure. Conversely, we show decentralization negatively impacted the experience of employees with
low ability and weak preferences for decentralization. This study provides novel insights into the effects
of decentralization, the micro-foundations of organizational design, and the human consequences of the
future of work.